International City units selling 30% below launch price

Release of new units will lower rents further, but not prices: Agents

By

Parag Deulgaonkar

PublishedMonday, October 10, 2011

Although average sale prices for apartments in International City have dropped by almost 30 per cent below their launch price, year to date, real estate agents believe that the release of additional units by Nakheel in the community will not have any impact on prices, except to further lower rents.

Average sale price for studios currently range between Dh150,000 and Dh170,000, while one-beds are being sold for Dh250,000 to Dh270,000.

On the rental side, studios can be leased for Dh17,000 to Dh19,000 per year, while one-beds are available for Dh22,000 to Dh26,000 per year.

In mid-September, Nakheel said it would commence the hand over of 26 buildings in the Emarati Cluster, totaling 1,663 units, before the year-end.

According to Parvees Gafur, Chief Executive Officer, PropSquare Real Estate, the new units will not have any impact on prices since the investors paid anywhere between Dh600,000 and Dh700,000 for their apartments.

“I don’t believe they will sell at the current rate. But most of the units will come into the rental market… we then can expect rents to fall by another 10 to 12 per cent.”

Mohanad Alwadiya, Managing Director of Harbor Real Estate, believes: “It all depends on the infrastructure and amenities within these new zones. The buildings that are well maintained will not be affected but the poorly maintained and managed buildings will surely get affected.”

The launch price of studios was Dh220,000 while one-beds were sold at Dh320,000.

In 2008, the average sale price touched a high of Dh870 per square feet, then declined to Dh600 per square feet in 2009 and now hovers at Dh300- 350 per square feet.

International City project was launched in July 2002 and consists of a residential district and a central district.

The residential district spreads over an area of 300 hectares and consists of 387 buildings, according to Nakheel.

The community will house 27,437 units, made up of 22,235 residential units (44.5 square metre studio and 66.5sqm one bed) and 5,202 retail units, while the central district covers an area of 21 hectares and consists of 34 plots.